Tesla stock down $50B after Musk bought Bitcoin with company cash
Tesla’s $1.5 billion bet on Bitcoin may have pumped the cryptocurrency to elastic-snapping new highs, but the same can’t be said for Tesla stock.
The auto giant revealed Monday it spent 8% of its reserves on 43,000 BTC ($2 billion) in January. Bitcoin’s price then quickly soared 20% to clear the $48,000 mark for the first time.
The thing is, Tesla’s share price has dipped 7% since its Bitcoin disclosure. That represents about $50 billion drained from the company’s market value.
Add to the mix crypto’s infamous volatility and folks with skin in the game are questioning whether CEO Elon Musk’s risk-taking has made things a little too hot.
Earlier this week, former Bernstein analyst and Bitcoin skeptic Gary Black offloaded his Tesla shares, tweeting, “$TSLA has always been higher risk, but investing $1.5 billion in Bitcoin makes it more risky.”
Baker Avenue chief strategist King Lip and Brown Advisory’s Tom Graff also reportedly voiced concerns.
[Read more: Chasing candles — here’s where Bitcoin’s ‘Tesla pump’ ranks in history]
Among the names cashing in their Tesla stock is Musk’s younger brother Kimbal.
The restaurateur and Tesla board member this month sold 30,000 shares worth roughly $26 million — although he still has plenty.
However, whether we’re about to see an investor exodus from Tesla might be a moot point for Bitcoin, considering more companies are tipped to follow Musk’s ‘risky’ lead.